Long-Term Cryptocurrency Analysis: Long-Term Downtrend Clearly Intact Despite Rally Attempt

While just looking at the past couple of days, the percentage gains in the major coins are impressive, and the short-term likely switched to bullish, but the cryptocurrency segment remains clearly bearish from a long-term perspective. Given the extent of the recent leg lower, the top coins would remain in downtrends even in the case of a much larger scale counter-trend move.

That said, traders could capitalize on the deeply oversold momentum readings and the horrible sentiment towards the segment in the coming weeks, with significant short-term gains being possible for the majority of the majors. Long-term investors should wait for at least a higher low before entering positions, as the pattern of lower highs and lower lows remains intact, and odds still favor at least a test of the previous bear market lows.

BTC/USD, Daily Chart Analysis

Bitcoin violated the $3600 support during the recent leg lower after breaking below the structurally important $5850 level, and the most valuable coin got close to testing the next key long-term support zone near $3000 before the current rally attempt.

The broad downtrend is in no danger despite the bounce, leaving our trend model on a clear sell signal, so any trading positions should only be held with strict risk management in the coin. The resistance zone near the $4450 level could be reached by the current move, with further resistance ahead between $4000 and $4050 and in the $5000-$5050 zone.

ETH/USD, Daily Chart Analysis

While Ethereum is on a short-term buy signal thanks to the oversold momentum readings and the recent bounce, the long-term downtrend remains clearly intact in the coin. ETH is currently trading right at the upper boundary of the $95-$100 support/resistance zone, and a move towards the $115-$120 and $130 resistance zone could be ahead in the coming weeks.

The fact that a rally up to $160 would still leave the downtrend intact shows the extent of the recent downturn, and without a protracted bottoming process, a new bull market is unlikely to beigin in ETH. With that in mind, traders should only consider short-term positions here, with strong support below $100 found near $75.

Ripple

XRPT/USD, 4-Hour Chart Analysis

Ripple managed to stay above the prior bear market low near the $0.26 price level, despite showing relative weakness for weeks, but the long-term sell signal remains in place in our trend model following the failed break-out attempt above the crucial $0.42-$0.46 support/resistance zone.

That said, the coin is on a short-term buy signal as of now, but form a broader perspective, new bear market lows are still likely. Resistance is now ahead near $0.3750 while support is now found at $0.355, $0.32, $0.30, and $0.26.

Litecoin

Litecoin/USD, 4-Hour Chart Analysis

Litecoin bottomed out near the $23 level following the latest leg lower in the bear market, and the coin is now back near the $30 support/resistance after breaking out of the steeply declining short-term trendline.

Despite the rally, the coin is in clear long-term downtrend, and although a rally up to the $34.50 and $38 levels is possible now, at least a retest of the lows will likely follow, and traders should only consider short-term positions in LTC here.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is in a similar technical pattern to Liteocin, but it’s weaker from a short-term perspective and the rally wasn’t enough to trigger even a short-term buy signal in our trend model. The long-term sell signal is in no danger here, but after hitting a bottom below the $60 level, the counter-trend rally could carry the coin up to the $95-$105 resistance zone, with primary resistance below that found between $75 and $80.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic was also among the bearish leaders of the bear market during the recent rout and the coin lost more than 60% since the latest breakdown. Despite the current rally attempt, the coin is not on a short-term buy signal, as it remains in a very weak technical setup.

Strong resistance is ahead in the $5.20-$5.50 zone, but after a sustained move above $4.50, traders could be looking for short-term entry points, even as the long-term sell signal is clearly in place and the broad downtrend is not in any danger.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero failed to maintain its relative strength after breaking down together with the broader market in November and although it violated its bear market low after the other top coins it led the way lower ever since then.

XMR is weak from a short-term technical perspective, and a move above $50 would be needed for even a short-term buy signal in our trend model. Strong resistance is ahead near $60 and $80, while support is found near $45 and $37.50, and traders and investors should still stay away from the coin.

NEO

NEO/USDT, 4-Hour Chart Analysis

The damaging downtrend in NEO continues to be dominant despite the current bounce, and the coin is among the weakest majors on both time-frames, being on a clear long-term sell signal and a neutral short-term signal in our trend model.

Strong resistance is ahead just above the current price level near $7, with further levels near $9 and $11, while support is found just below the $5.50 level, and traders still shouldn’t enter positions here.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is in a slightly better technical position compared to the other recent bearish leaders, and the recent bounce triggered a short-term buy signal in our trend model, while leaving the long-term sell signal in place. A rally up to $0.35 or even to $0.40 could be ahead in the coming weeks, but traders should only consider short-term positions here, with support found near $0.24 and near $0.21.

EOS

EOS/USD, 4-Hour Chart Analysis

While percentage-wise EOS has been among the top performers, given the still weak technical setup and the strong resistance just ahead in the $2.75-$2.80 area, the coin is still only on a neutral short-term trend signal while being on a clear long-term sell signal.

EOS will likely at least retest its lows in the before a sustained trend change, and even in the case of a short-term sell signal in the coming period, traders should remain extremely cautious with the coin, with further resistance zones ahead near $3.5 and $4.50.

Stellar

Stellar/USDT, 4-Hour Chart Analysis

Stellar has shown relative weakness since breaking down below the structurally important $0.1775-$0.195 zone, and the coin is still weak from a technical perspective on both time-frames, despite the strong bounce.

With that in mind, traders and investors still shouldn’t enter positions here, and new lows remain likely following the counter-trend move. Resistance zones are now ahead near $0.125 and $0.14, while support is found just below the current price level, and near $0.09.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Author:
Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.